Between teaching, working with staff, tutoring, and building a freelance career

Thursday, August 31, 2006

What Was Radio Shack Thinking?

This is a bit off the usual Financial Rounds beaten trail, but some things just deserve comment.

RadioShack (ticker: RSH) has had some hard times lately - sales have been down, and the price of their common stock has dropped from the $20 range in early April to a low of less than $14 in June (it's since rebounded to $18).

But they just informed some 400 employees (mostly in their home office) that they were to be laid off immediately - BY EMAIL!

What were they thinking? This has to be one of the crassest classless, and most tone-deaf corporate moves I've seen in a long time. And that says a lot, since as a finance professor, I'm staunchly pro-business.

Consumers may want to rethink their loyalty to Radio Shack after this decision. If this is how they treat their employees, imagine what Radio Shack thinks of their customers.

It's an inexcusable business decision. Managers who lack the fortitude to communicate terminations directly should not serve in that capacity. I can tell you from long experience how upsetting a termination can be for the manager involved, but in well over a decade of management, I have never once been tempted to do it by mail, e-mail, or semaphore. Even the worst employees deserve to have their manager take the time to sit down with them and explain the decision to terminate employment.

I agree - RadioShack management should figure out how to grow some necessary "equipment" that they seem to be missing.